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Coalition writes Congress to propose ending VEETC

This week a coalition of 90 organizations wrote a letter to Congressional leaders urging them to allow the Volumetric Ethanol Excise Tax Credit (VEETC) to expire at the end of this year. The coalition also asked that Congress not allocate funding for infrastructure that would support further development of corn-based ethanol (federal funding of blender pumps, for example).

The coalition wrote that Congress “has the opportunity to end the $6 billion a year subsidy to gasoline refiners who blend corn ethanol into gasoline. At a time of spiraling deficits, we do not believe Congress should continue subsidizing gasoline refiners for something that they are already required to do by the Renewable Fuels Standard.”

“We have long opposed VEETC because it is wasteful and duplicative and because corn ethanol is a mature industry that should be able to stand on its own two feet,” said Ryan Alexander, president, Taxpayers for Common Sense, a non-partisan watchdog group in Washington, D.C. Founded in 1995, the organization “has had a long history of fighting energy subsidies, including oil and gas subsidies,” Alexander said.

Asked why Taxpayers for Common Sense resists funding for infrastructure for biofuels, Alexander said, “Taxpayer subsidies for ethanol infrastructure make no sense. That is the cost of doing business for the industry. Quite frankly, as a taxpayer, being asked for yet another subsidy from ethanol is ridiculous. We could end up with a mandate, a tariff, infrastructure subsidies AND a tax credit.”

Ethanol could no doubt compete more effectively if subsidies and tax incentives were removed for the oil industry. Alexander agreed. “If subsidies for the petroleum industry were repealed through the tax structure, this would be a boon for every other form of energy.” But, these other forms of energy are up against the world’s oldest and richest industry, she said.

Asked whether Taxpayers for Common Sense supports the development of cellulosic ethanol, Alexander said, “Like most Americans, we would like to see new sources of renewable domestic fuel sources developed. But we’re skeptical of all energy subsidies, in part because of the lessons we’ve learned from the corn ethanol subsidies that have remained on the books despite their duplicative and wasteful nature – and their persistence even as the industry has matured.”

Among the 90 organizations in the coalition are the American Meat Institute, Environmental Working Group, Grocery Manufacturers Association, MoveOn.org, the National Chicken Council, as well as several other agricultural groups, taxpayer advocates, religious organizations, environmental groups and public interest organizations.